Members of the Gyeonggi Provincial Assembly affiliated with the Democratic Party of Korea held a press conference on the 23rd, stating that the public development of Daejang-dong in Seongnam City is the best model case in Korea for returning development profits to citizens, expressing their support for Governor Lee Jae-myung.
[Asia Economy (Suwon) = Reporter Lee Young-gyu] Sixty-seven members of the Gyeonggi Provincial Council expressed strong support for the policy decisions made by then Seongnam Mayor Lee Jae-myung, stating that "the Daejang-dong development in Seongnam City is a representative example of a public development project led by the basic local government of Seongnam City during Lee Jae-myung's tenure as mayor, which returned development profits to the citizens."
The council members held a press conference at the Suwon Provincial Council briefing room and stated, "Originally, Daejang-dong was supposed to be developed publicly by LH (Korea Land and Housing Corporation), but the project was changed to private development after Shin Young-soo, a member of the National Assembly from the People Power Party (then the Grand National Party), pressured LH."
They then explained the reasons behind the change in the project and the background of how relatives of lawmakers from the Grand National Party, the predecessor of the People Power Party, and LH officials were subsequently arrested.
The council members claimed, "On October 9, 2009, President Lee Myung-bak stated that '(LH) does not need to compete with private companies,' and the next day, then LH President Lee Ji-song held a press conference announcing the abolition of competition with private companies. On October 20 of the same month, Shin Young-soo, then a Grand National Party (predecessor of the People Power Party) lawmaker, pressured LH during a National Assembly audit to abandon the Daejang-dong development project, leading LH to withdraw from the public development project the following year."
They continued, "When candidate Lee Jae-myung was elected mayor of Seongnam, he focused on this suspicious project. There was a 'Daejang-dong lobbying scandal' involving real estate developers, including the brother of Shin Young-soo, a Grand National Party lawmaker who pressured LH, receiving bribes worth hundreds of millions of won. As a result, six LH executives were arrested and nine people were indicted."
The council members stated, "Ultimately, it was because of Mayor Lee Jae-myung of Seongnam City that the private developer was prevented from monopolizing 100% of the development profits, and approximately 550.3 billion won in profits were returned to the citizens of Seongnam. This was not a special favor granted to private companies, as some conservative media claim, but a recovery of benefits for the citizens of Seongnam," praising the effort highly.
Furthermore, they explained, "For Seongnam City to carry out the public development of Daejang-dong, which LH had abandoned, it had to be done directly. However, since Seongnam City did not have sufficient funds, it ultimately had to issue local bonds. But issuing local bonds requires approval from the Minister of the Interior and Safety, and under the Grand National Party government, which opposed public development at the time, approval for local bond issuance was impossible," revealing the background behind choosing the private development method.
They particularly noted, "At that time, Seongnam Urban Corporation was a newly established corporation with limits on bond issuance, and neither Seongnam City nor the newly established Seongnam Urban Development Corporation could directly raise project funds due to legal restrictions, making it inevitable to mobilize private funds."
The council members argued that pure public development was only possible with the financially strong LH, but since LH was excluded from the project, the only option for Seongnam City was to select and promote a private developer without incurring losses.
In fact, it was confirmed that Seongnam City set three major principles while promoting the project: eliminating the possibility of corruption, preventing disputes among project stakeholders, and ensuring that Seongnam City would not be exposed to risks such as project failure.
The council members praised, "Seongnam City ultimately selected the private developer who offered the highest profits to be accrued and proceeded with the project, recovering and returning 550.3 billion won in profits to the citizens of Seongnam. This is the best local government-led public development project in South Korea."
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